Rosy prices mask state’s housing crisis

Despite the continued economic uncertainty caused by the coronavirus pandemic and a recent climb in interest rates, the state’s residential real estate market continues undeterred on its sizzling pace.

According to a recent market update authored by the Greater Boston Association of Realtors (GBAR), sales of single-family homes and condominiums rose on an annual basis for the sixth consecutive month in metropolitan Boston during February, while median selling prices similarly increased in both markets to new highs for the month.

Those positive numbers offer an early sign that the area’s housing market will likely be even more competitive during the traditionally active spring home-buying season.

In the residential market, 598 single-family homes were sold in February, which reflects an 8.3% increase from the 552 homes sold in February 2020. Last month’s sales total is the fourth highest on record for February in Greater Boston.

Similarly, condo sales improved 5.1%, from 604 units sold last February to 635 in February 2021, making last month the second most active February for condo sales on record.

With the number of buyers vastly outpacing houses for sale in many areas, median sales prices also continued to appreciate.

The single-family home median selling price rose by 5.7%, climbing from

$614,000 in February 2020 to new all-time high for the month of $648,750 this February.

In the condo market, the median selling price increased 3.1% over the prior 12 months, rising from a median price of $579,000 in February a year ago to a new record high for the month of $597,000 this February.

“There’s a lot of pent-up demand from buyers who’ve been house-hunting for months, if not years, and their search has become a year-long effort,” said GBAR President Dino Confalone, an agent with Gibson Sotheby’s International Realty in Cambridge.

That translates into, as Confalone pointed out, to “lines of buyers waiting to get in to open houses, frequent multiple-offer situations, and homes priced right selling quickly,” often above the asking price.

The limited inventory and seemingly unlimited number of aspiring homebuyers puts sellers squarely in the driver’s seat.

“Many buyers find themselves having to compete to outbid one another, and that’s helping to drive up prices further,” Confalone observed.

The effects of this frenetic housing market — including multiple offers and bidding wars — extend far beyond the Boston suburbs and the Route 128 belt.

According to the national real estate brokerage firm Redfin, the median selling price for a home in Lowell reached $400,000 in February, with an average sale to list ratio of 100.8%, up from $357,000 and 100.7%, respectively, in January.

In short, that means half the homes in Lowell during that month sold for at least $400,000, oftentimes for more than the asking price.

The fact that’s happening in a Gateway City is a sure sign of an overheated, sellers market virtually everywhere in this state.

It’s not uncommon that even in Lowell, sales of single-family homes will quickly elicit multiple offers.

Buyers must not only assume that any decent property will likely sell above its listing price, they must also be prepared to make concessions, like forgoing a home inspection as a purchase condition.

Though this seems like a home seller’s nirvana, this supply-demand imbalance perpetuates the state’s affordable housing crisis.

Lack of inventory can also work against potential downsizing sellers if they can’t find anywhere to move.

Left unchecked, it will seriously hamper this state’s ability to attract and retain the skilled workforce it needs.

Only a long-term, coordinated campaign to increase all manner of residential properties — apartment rentals, condos and singlefamily homes — will alleviate our state of housing haves and have-nots.